Thursday, May 31, 2012

More than one-quarter of all U.S. home sales in the first quarter involved homes that were either in some stage of foreclosure of were bank-owned, according to real estate research firm RealtyTrac. Twenty-six percent of 1st quarter home sales involved distressed properties, up from 22 percent during the fourth quarter 2011 and up from 25 percent of sales from a year ago.

Distressed homes sold for an average price of $161,214 in the first quarter, 27 percent less than what homes that were not in foreclosure sold for, according to RealtyTrac.

Pre-foreclosure sales including short sales ­- where the homeowner is selling a house for less than the amount owed - also hit a three-year high in the first quarter as lenders were more willing to approve such deals, said RealtyTrac chief executive Brandon Moore.

Home sale data released recently suggest the housing market is improving. The S&P/Case-Shiller Home Price Index, for example, showed average home prices in Charlotte increased 0.4 percent in March compared to a year earlier.

Foreclosure sales were the highest proportionately in Nevada, California and Georgia, accounting for 56 percent, 47 percent and 46 percent of sales, respectively.

In North Carolina, foreclosures accounted for 12 percent of sales and in South Carolina foreclosures made up 16 percent of home sales in the first quarter.

An article I wrote last week about a new apartment complex in Plaza Midwood mixed up some important numbers.

The Edison, to be built at Pecan and Commonwealth avenues, will feature 53 apartments that are smaller and less expensive than the city average and cater to renters who like to walk and enjoy the eclectic east Charlotte neighborhood.

Rents on the units will start at $800 per month for a 500-square-feet apartment. A two-bedroom unit with upscale finishes will start around $980 a month.

The project is being developed by Lat Purser & Associates Inc. of Charlotte. The firm, which bought the land a few months ago, is focusing on smaller, in-fill projects.

Monday, May 21, 2012

The luxury condominium tower The Vue is set to be sold at public auction at 10:15 a.m. June 12 on the first floor of the MecklenburgCountySuperior Courthouse.

Clerk of Superior Court Martha Curran signed an order Monday clearing the way for the lender to foreclose on the 409-unit building at Fifth and Pine streets.

The entire building and its contents will be sold at once, excluding the condos and parking spaces that have already been sold to individual buyers. Buyers have closed on less than two dozen units on the luxury highrise.

Neither the borrower nor a representative of the Vue attended the roughly 20-minute hearing.

The Vue's developer, MCL Cos. of Chicago, defaulted on its loan, and the current owner of the debt, New York-based Northwood Investments, accelerated the loan and started foreclosure proceedings in April, according to court filings.

The current debt holder, identified in court papers as NWSF LLC, lists its address as Northwood Investments in New York.

Northwood Investments paid around $100 million for the project's $195 million construction loan, it has been reported.

The tower has struggled since it was finished in 2010. When sales started in the mid-2000s, the building was touted as one of uptown's most luxurious residences, offering the highest-quality amenities, an Olympic-sized swimming pool and tennis courts.

The Vue's condos started selling from just under $200,000 to more than $2 million. Buyers paid 10 percent of the contracted sales price as a deposit. Developer Dan McLean has said that more than half the building was pre-sold but agents struggled to close sales. Some buyers couldn’t get financing because appraisals came in under contracted sales prices. Others simply wanted out of their contracts.

Some people have successfully sued the Vue to return their deposits but are now less likely to get their money back, attorneys say.

Real estate professionals say the building could be ripe for a conversion to apartments. Other uptown condo projects have been changed into rentals after the real estate market fizzled.

As the Charlotte housing market has struggled, more people have turned to renting versus buying a home, fueling interest in the apartment market.

Friday, May 18, 2012

The vacancy rate for Charlotte’s office market in the first quarter ticked down to 17.9 percent from the annualized 18.4 percent in 2011, according to the latest report by research firm Karnes.

Demand outpaced supply during the quarter, despite the addition of nearly 22,000 square feet of new space in the Honda Financial Building in Ballantyne.

Charlotte’s suburban market dominated the demand during the quarter, while the Midtown area also posted strong gains as 17,000 square feet of space was removed from the market.

The largest new tenant moves occurred in Ballantyne, thanks to Mitsubishi Nuclear moving into 25,175 square feet of the HayesBuilding and Honda Financial Services opening a new building in BallantyneCorporatePark.

At $21.95 a square foot, average rents are creeping up from lows of $21.77 in 2010. Rents hit a recent high of $22.38 in 2008, according to Karnes.

The Charlotte area has more than 49.25 million square feet of office space in buildings that are 15,00 square feet or larger.

The warehouse and industrial market vacancy rate, meanwhile, rose slightly to 13.4 percent from 13.3 percent reported for the end of 2011. Average rents also dipped to $4.04 from $4.05 for warehouse space and to $8.22 from $8.26 for flex space. The market has more than 43.3 million square feet of warehouse and flex buildings.

An increasing number of golf clubs have closed or changed hands sincethe recession. Some have shuttered because of falling revenues. Fewerpeople are joining clubs and existing members are playing fewer roundsand spending less on services, according to national tradeassociations. Other clubs have been targeted for foreclosure becausethe owners defaulted on loans or couldn't refinance.

In the Charlotte area, Firethorne Country Club in Marvin was scheduledto be sold after the club defaulted on its loan. The club later filedfor Chapter 11 bankruptcy protection. More recently, real estate mogulDonald Trump bought The Point Lake and Golf Club near Mooresville.Club members say the club was financially sound but in need of costlyrenovations. Trump has said he plans to pump millions into the GregNorman-designed course and club to make it a world-class facility.

The bank started foreclosure proceedings against Pine Knolls' owner,Hibernia Holdings, and its principals, last year, according to courtfilings.

Mark Troen, chief operating officer with the company hired to sellclub, said the entire recreation industry is struggling. His firm,Racebrook Marketing Concepts, a private equity firm based in NewYork, has sold golf courses, ski areas and marinas.

"Every one of these venues has experienced an upheaval and change andgolf courses are clearly part of it," he said. "There was tremendousinvestment in the first part of the last decade, and now they arepaying the price for that over-investment."

Troen said his firm has found there are three types of buyersinterested in golf clubs: The entrepreneur who loves golf and wants toturn a hobby into a job; institutional buyers and large corporationsthat already own golf clubs that want to expand their holdings; andlocal businesses that want to own a golf course so they can brand thecourse and market themselves.

The public auction will be held June 13 at the Marriott Winston-Salem,460 N. Cherry Street, Winston-Salem. Registration begins at 10 a.m.and the auction starts at 11 a.m. For more information go tohttp://www.golfcourseauction.com/.

Monday, May 14, 2012

Nonresidential construction posted a surprising weak performance during the first quarter, according to the economic gurus at Wells Fargo Economics Group.

Most of the 12 percent annual decline came from a sharp pullback in natural gas exploration and production, according to the bank's Commercial Real Estate Chartbook Quarter 1, released today. The office, retail, power, lodging, amusement and recreation sectors also posted declines, the authors reported.

Despite the large drop in nonresidential spending during the quarter, the economists remain "somewhat optimistic that nonresidential construction will make a positive contribution to economic growth in the coming quarters," the report says.

Nuclear power plant construction is expected to boost construction, including such projects underway in South Carolina, the authors say.

On a more positive note, demand for income-producing properties continues to increase, particularly for apartment and warehouse properties, the report says.

Apartment rents are rising fastest in the areas benefiting from growth in mobile computing and social networking, such as San Francisco, San Jose and Austin. Chattenooga saw significant rent increases because of a Volkswagen assembly plant that opened last year, as did Charleston thanks to the Boeing assembly plant that is drawing skilled workers to the area.

Friday, May 11, 2012

Balfour Beatty Construction has hired Mike Baumbach and Jeff Thompson to lead its newly formed healthcare business unit in their Carolinas Division. The two executives will lead the division’s efforts to grow its expertise and client pipeline within the Carolinas, eastern Georgia, and southwest Virginia.

“The move to Balfour Beatty is important to us for several reasons,” said Jeff Thompson, who will assume a business development leadership position. “The ability to combine national healthcare expertise and Balfour Beatty’s leading local market presence is a good strategic fit. Their reputation for their people-focused culture, streamlined local decision making, and the entrepreneurial spirit of employees are among the many reasons we feel comfortable bringing our already established relationships to their Healthcare business unit.”

Baumbach and Thompson have worked together serving healthcare clients in both public and private sectors.

“Personally, it is very gratifying to once again work closely with Mike and Jeff, having started my career working shoulder-to-shoulder together at the same Charlotte-based construction company in 1986,” said David Dooley, executive vice president.

Healthcare projects Balfour Beatty Construction has been involved in include Parkland Hospital in Dallas, Vanderbilt University Medical Center in Nashville, and the Walter Reed Hospital in Bethesda.

Thursday, May 10, 2012

The folks at Trinity Partners are trying a new approach to
attracting office tenants.

They are building out office spaces in their uptown AllyCenter,
getting them move-in ready for prospective tenants. They are installing modern,
upscale finishes such as bamboo flooring and glass tile, the developer says. Conference
rooms and break areas will also have upgraded finishes.

Traditionally, office tenants sign leases for
unfinished spaces and work with landlords to build-out the area.

The owners of the 15-story AllyCenter
decided to offer finished units to cater to smaller tenants who wanted space
immediately, said Gary Chesson, a partner with
Trinity Capital Advisors, a real estate investment firm that developed the
office building and has an ownership stake.

“We are trying to pioneer
this concept here in the downtown area,” Chesson said. “Many smaller
tenants...don’t want to wait for the six-month
process of negotiating terms, then signing a lease document, then doing
drawings, pricing and permitting and finally building the space.”

In all, the building at 440
S. Church Street has 130,000 square feet available
on five floors. Trinity plans to offer
roughly 19,000 square-feet of pre-built space: 3,500 square feet on the second
floor, 11,400 square feet on the third floor and 3,200 square feet on the 8th
floor.

The building, completed in 2009, will be able to accommodate
tenants ranging from 2,000 square feet to 10,000 square feet. The larger space
can also be configured to extend to 26,000 square feet, Chesson said.

Pricing will range from $23 a square foot to $24 a square foot, depending on the tenant's size.

In the past, pre-built offices were seen by some as inferior because
they involved leftover pockets of space and low-quality finishes, such as basic
carpet.

Attitudes are changing, say people involved in commercial real
estate. These days, more companies are attracted to pre-built space if they
have nice finishes. The interest is coming from companies that don’t have the
time or the cash to endure the construction process, which can last half a year.

Last year, a growing number of New York landlords got involved in the
pre-built business, offering space with granite and marble finishes,
stainless-steel appliances, and coffee bars, the New York
Times has reported.

Chesson said the building is getting nibbles from tenants and
that his company has agreed to lease a small portion of one of the suites to a
law firm. He said he couldn’t provide details because the lease wasn’t yet
signed.

"It's working already," Chesson said of the pre-built concept. "This was a firm that needed space by June 30 but couldn't find a layout they liked in the market, and this was going to be ready to go when they needed it."

Monday, May 7, 2012

Formerly known as GMAC Financial Services, the firm occupies 43,000 square feet in the South Park office tower and has space in the Toringdon office park in south Charlotte and Ally Center at 400 S. Church St. in uptown.

David Dorsch with Cassidy Turley represented the landlord, DRA Advisors, while Chase Monroe and Matt Bowen with Jones Lang LaSalle represented the tenant.

Colonial Plaza was known as the Esplanade building until it was purchased by developer Colonial Properties, renovated and renamed.

Ely Portillo

Ely Portillo

About this blog

Ely Portillo covers economic development for the Observer, writing about who's building what in a city that seems to be sprouting new apartment and office towers on every corner. He also writes about Charlotte's airport, a major hub that's also undergoing a huge growth spurt. A transplant from Maryland, he's been reporting on his adopted hometown for more than five years. If you have a tip or story idea to share, you can contact him by email or give him a call at 704-358-5041. For the latest news, follow him on Twitter @ESPortillo.